ENGINE SPEED INCREASE

The engine will accelerate 500 - 700 RPM's or more when I shift the transmission into neutral. Why does this happen. It won't freewheel going down hills either.

Secondly, it will also show an autotransaxle warning signal and will not allow the car to shift into overdrive. If I turn off the ignition and restart it, the light goes off and will shift into overdrive. It has done this for over four years but no one seems to have a solution.